Bitcoin Just Matched FTX-Era Liquidation Levels – But It Could Create an Opportunity
Bitcoin liquidations hit FTX-era levels due to excessive leverage, potentially creating a medium-term buying opportunity after the forced deleveraging.Summary
Bitcoin's recent liquidations have reached levels comparable to the FTX collapse, but the cause this time was an unprecedented market overload of leverage, not exchange fraud. Analyst Darkfost noted that open interest reached $47.5 billion, triple the 2021 peak, leading to a cascade of forced selling when prices dropped. Unlike the 2022 event, this shakeout signals structural market health rather than failure, as excessive leverage has been violently washed out. Following the deleveraging, funding rates turned negative, open interest eased, and crucially, spot trading spiked, suggesting genuine buyers are stepping in. Historically, such leverage flushes create strong medium-term opportunities, similar to the post-FTX reset that ended the bear market. However, caution is advised due to lingering macro uncertainties and the persistent lack of risk management education among accessible, lightly regulated crypto traders.
(Source：BeInCrypto)